Cheque concept, types, crossing of cheque

Cheque concept, types, crossing of cheque

1. Definition

‘Cheque is an instrument in writing containing an unconditional
order, addressed to a banker, sign by the person who has deposited
money with the banker, requiring him to pay on demand a cer

sum of money only to or to the order of certain person or to the
bearer of instrument.”

Section 5 of the Indian Negotiable Instrument Act of 1881
defines the Cheque as “4 Bill of Exchange drawn special
on a specified Banker and not on expressed to be

payable otherwise than on demand”.

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3. Cheque

Bearer Cheque
Order Cheque
Open Chequ
Crossed Cheque
Anti-Dated Cheque
Post-Dated Cheque
St

Mutilated Cheque

4. Bearer Cheque

The words printed on the cheque, & it is not cancelled,
then the cheque is called a bearer cheque.

A bearer cheque is made payable to the bearer i.e. it is payable to
the person who presents it to the bank for encashment

In simple words

's a cheque which is payable to any person
who presents it for payment at the bank counter is called

Bearer cheque

5. Order Cheque

+ The word "or order" is written on the face of the cheque, the
cheque is called an order chequ

cheque is payable to the person specified therein as the

, or to any one else to whom it is endorsed (transferred),

6. Open Cheque

When a cheque is not crossed, it is known as an “Open Chequi
or an “Uncrossed Cheque

These cheques may be cashed at any bank and the payment of
these cheques can be obtained at the counter of the bank or
transferred to the bank account of the bearer.

An open cheque may be a bearer cheque or an order cheque

7. Cro:

ed Cheque

Crossed cheque means drawing two
comer of the cheque with or without
“Account Payee Only” or “Not Negot
A crossed cheque cannot be

bank but it can only be credited to the

fer way of transferring money th
cheque.

@ucıcı a.

on the left

additional words like

This is a
n Uncrossed or open

8. Anti-Dated Cheque

+ Cheque in which the drawer mentions the date earlier than the date
on which it is presented to the bank, it is called as “anti-dated
cheque”

Such a cheque is valid upto six months from the date of the
cheque drawn.

9. Post-Dated Cheque

+ Cheque on which drawer mentions a date which is yet to come

(future date) to the date on which it is presented, is called post-
dated cheque

+ For example
If a cheque presented on 10th Jan 2012 bears a date of 25th Jan 20
is a post-dated cheque. The bank will make payment only on or after
25th Jan 2012

10. Stale Cheque

+ If a cheque is presented for payment after six months from the
date of the cheque, it is called stale cheque. After expiry of tha
period, no payment will be made by banks against that cheque.

A stale cheque is not honored by the bank.

11. Mutilated Cheque

+ When a cheque is torn into two or more pieces and presented for
payment, such a cheque is called d cheque. T
will not make payment st such a cheque without getting
ation of the